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ale4655 [162]
3 years ago
13

If a payback period for a project is greater than its expected useful life, the project's return will always exceed the company'

s cost of capital. entire initial investment will not be recovered. project would only be acceptable if the company's cost of capital was low. project will always be profitable.
Business
1 answer:
Rudiy273 years ago
3 0

Answer:

entire initial investment will not be recovered.

Explanation:

Payback period is one of the methods used in capital budgeting.

Payback period calculates how long it takes for the amount invested in a project to be recovered from its cummulative cash flows.

For example, if a project costs $360 and the cash flow each year for its 6 years useful life is $120. The amount invested would be gotten back from the cummulative cash flow in 3 years.

But if a project costs $360 and the cash flow each year for its 2 years useful life is $120. The amount invested would never be gotten back the cummulative cash flow. Therefore, the entire investment amount will never be entirely recovered.

The project will always not be profitable

I hope my answer helps you.

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Which one of the following represents a cash outflow from a corporation? Multiple Choice Issuance of new securities Payment of d
Mila [183]

Answer:

B) Payment of dividends

Explanation:

Dividend is the reward, (which can either be cash or non-cash) paid by a corporation out of profit or reserve at the end of a period to its shareholders. This share of profit is a reward received by investors as a result of their investment in a corporation

Where dividend is paid out of the cash asset of the corporation, it will represent cash outflow from the corporation.

Sometimes a corporation will want to save money by paying script dividend (i.e. share dividend) such does not involve cash outflow, but issue of shares.

4 0
4 years ago
Floribama Clothing has generated $130,000 in sales during the past few months, and it is expected that this level of sales will
Zarrin [17]

Answer:

Explanation

Month.

1. 2. 3

Infows

Bal b/f. (60,060)(42,120)

Sales 50,440. 78000

Sales 50,440. 78,000

Sales. 50440

Outflows

Purchases 91000 91,000. 91,000

Wages. 19500. 19500. 19500

Bal c/d. (60,060 )(42,120)(24180)

8 0
3 years ago
Klaus toys just paid its annual dividend of $1.40. the required return is 16 percent and the dividend growth rate is 2 percent.
Marina86 [1]

The expected value (EV) is a probable value for a given investment. By calculating expected values, investors can decide the scenario most likely to give them their preferred result.<span>
<span>
Formula for expected value is:</span></span>

Expected value = stock return’s annual dividend divided by (required return – dividend growth rate)

P₅= [$1.40×(1 + 0.02)₆<span>]/(0.16 - 0.02) = $11.26</span>

The answer is $11.26

7 0
4 years ago
Create a step-by-step international negotiation plan for how you would approach business with Japan
avanturin [10]
1. Learn Japanese or get a translator
2. Buy lots of stock in Japanese video games like Dance Dance Revolution or Nintendo products
3. Make a lot of anime tv shows
4. Make sure to tell the government what you’ll do to insure they know isn’t illegal
5. Get that fat city wok cash
6 0
2 years ago
The countries that have made the least use of securities markets are ________ and ________; in these two countries finance from
netineya [11]

Answer:

<u>Germany</u> and <u>Japan</u>

Explanation:

Financial intermediaries refer to the institutions which serve as a link between spenders and savers. Examples of financial intermediaries are banks, investment banks, pension funds, etc.

Securities markets refer to the markets which deal with the issuance of equity, debt and derivatives securities. Such issue of securities facilitates the raising of capital by businesses.

Direct finance usually takes place in capital markets dealing in securities with maturity period of more than an year, such as equity and bonds.

Indirect finance takes place through financial intermediaries such as banks, pension funds, etc. Such intermediaries remove the operation of middlemen between lenders and borrowers.

Germany and Japan have utilized their nation's bank credit based financial system.

3 0
3 years ago
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